2014
Reporting, economic focuses on reporting developments in the national economy - and, occasionally, the state economies - and the efforts of governments and their agencies to influence the economy. It covers economic policy, micro-economic as well as macro-economic. It is to be distinguished from business (formerly financial) reporting, which focuses on the activities of listed companies and the stock exchange. Economic journalists devote most of their time to reporting and interpreting movements in the wide range of economic indicators published by the Australian Bureau of Statistics, covering unemployment, inflation, wages, retail sales, housing activity, gross domestic product, trade and much else. Other economic indicators are published by the Reserve Bank of Australia, while the commercial banks sponsor regular surveys of such things as business and consumer confidence.
Economic journalists also report announcements concerning the federal government’s budget, official reports, speeches and press releases by senior economic ministers and bureaucrats, including announcements of changes in official interest rates by the Reserve Bank, as well as statements from business lobby groups.
Because most of these announcements are made in Canberra, most economic reporting is done from the federal parliamentary press gallery. This is true of most reporting of Reserve Bank announcements, even though the bank is headquartered in Sydney. The main national and metropolitan newspapers have specialist economics correspondents in the gallery, most of them with university qualifications in economics. In smaller gallery bureaus the reporting is done by political correspondents.
The financial deregulation of the 1980s had the effect of greatly expanding the choice of sources available to economic journalists, with its growth in financial-market economists keen for publicity and need for the Reserve Bank to be more active in media relations. Growth in think tanks and university research centres has also helped reduce Treasury’s former dominance of economic information.
The distinction between financial and economic reporting was probably pretty blurred until the late 1960s and early 1970s, when economics became seen more clearly as a specialty within federal political journalism. During the 17 years he spent as financial editor of the Sydney Morning Herald, Tom Fitzgerald combined editorials and commentary on economic management with his path-breaking exposes of corporate mismanagement. When he left to join the Australian in 1970 he was replaced by both a financial editor and an economics editor, although the SMH had employed the British journalist J. C. Horsfall as its economics editor for several months before he became the foundation editor of the Australian Financial Review in 1951. By contrast, from the time Max Newton left Treasury to join the SMH in 1957, he would always have written more about the economy in a political context than about the world of companies.
Referring to SMH editors of the 1950s, Horsfall complained in his book, The Liberal Era, published in 1974: ‘The trouble with most editors was that the subject of economics which had become the main stuff of politics was largely a mystery to them’. It was this dawning realisation that led to greater media interest in reporting the management of the economy and the changed perception of it as part of political reporting rather than business reporting. This perception was mightily reinforced in 1974 when, in the aftermath of the first OPEC oil shock, the advent of ‘stagflation’ - simultaneous high inflation and high unemployment - led governments in all the developed economies to a loss of confidence in the simple Keynesian remedies of the post-war era and a period of experimentation with solutions as different as incomes policies and control of growth in the stock of money. The restoration of low inflation and low unemployment was to dominate those governments’ concerns throughout the remainder of the 1970s and the whole of the 1980s - longer in Australia’s case. Tracking the ups and downs of the economy has remained a major media interest to this day, even without the added impetus of the global financial crisis in 2008 and the lingering Great Recession it precipitated.
The rise of economic journalism as a specialty within political journalism can be traced in the careers of its leading practitioners. Kenneth Davidson worked for Treasury before becoming the Australian’s Canberra-based economics correspondent in 1965 and the Age’s economics editor in 1974. Only a few years earlier, Alan Wood, who had been a Canberra economics correspondent for the AFR, became economics editor of the SMH. After a period out of daily journalism he returned eventually as economics editor of the Australian. P. P. McGuinness joined the AFR as an economics writer in 1971, left to work for the Whitlam government, then returned as economics editor in 1974. When the author, who had worked as a chartered accountant, joined the SMH as a cadet in 1974, he was encouraged to focus on economics rather than business, sent to Canberra late that year as economics correspondent and returned to Sydney in 1976 to replace the departing Wood as economics editor.
Whereas in recent decades governments have sought to discourage contact between journalists and bureaucrats, the technical nature of their task my help explain why economic journalists have been able to maintain active contact with senior econocrats, including those of Treasury and the Reserve Bank. Although almost all economic reporters are located within the Canberra press gallery, the major papers are divided on whether their economics editors - whose work chiefly involves economic commentary - should be stationed in Canberra or at the paper’s head office. At present the economics editors of the Age, the Australian and the West Australian are based in Canberra, whereas those for the AFR and the SMH are based in Sydney.
American practice is for movements in economic indicators to be reported in neutral terms, accompanied by balanced quotes from experts saying the figures are good while others are quoted saying they are bad. In Australia, however, reporters are more likely to take their own stand on whether the movement is good news or bad. This may be because, in Australia, the reporters are more likely to have economic qualifications and on-the-job training in the interpretation of statistics. But this can lead reporters and their editors into the temptation of judging movements according to their perception of whether readers would regard the change as good or bad. Movements in interest rates, for instance, are almost invariably judged from the perspective of readers with a mortgage rather than those dependent on interest income from investments. An overused formula in modern times is for movements in indicators to be judged according to whether they make an increase or decrease in the official interest rate at the next meeting of the Reserve Bank board more likely or less likely. Since the indicators are volatile, this can generate headlines that show the prospect for interest rates rising, falling and rising again in the same week. Falls in the dollar are usually taken to be bad and rises good, mainly because of their effects on the prices of imports and overseas holidays; effects on the competitiveness of Australian industries tend to be ignored. A fall in unemployment during an election campaign may be billed as ‘good news for the government’ rather than good news for those seeking jobs.
Perhaps because there is so much room for interpretation of economic developments, economic journalism tends to involve more analysis and commentary than in other specialist areas of journalism. This is largely the role of economics editors, who tend to do little reporting and even less editing. Whereas political journalists strive to appear even-handed in their commentary - telling Labor how to win one week then the Coalition the following week - economics editors rarely hesitate to push their own view of what constitutes good policy, even to campaign in favour of particular economic reforms. The line they take generally reflects the economic orthodoxy they were taught at university, which is regularly reinforced by their bureaucratic contacts. Historically, it is less likely to reflect their paper’s editorial line than for their line to be reflected in the editorials. The economics editors’ ethic, however, is that their line should seek to advance the public interest according to their own economic beliefs and personal values, not any private party-political sympathies, much less their personal interests. It can thus be argued that the work of economic journalists played a part in the rise of economic rationalism in the 1980s and 1990s and the various micro-economic reforms it led to, particularly the phasing out of protection against imports.
References
Gittins, Ross (1995) The Role of the Media in the Formulation of Economic Policy, Australian Economic Review, 4th quarter, Institute of Applied Economic and Social Research, Melbourne, Wiley-Blackwell.
Gittins, Ross (2011) Economic Journalism: How Influential are Journalists, Economic Papers, vol 30, no. 4, December, Economic Society of Australia, Wiley-Blackwell.
J. C. Horsfall (1974) The Liberal Era: A political and economic analysis, Sun Books, Melbourne.
